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Small Business: JOBS Act Breakdown For Startups

Recently congress passed a bill that can help startups and entrepreneurs alike. President Obama had congress pass the JOBS Act(Jumpstart Our Business Startups Act). This act, signed on April 5, 2012, helps small businesses find funding with less hassle.



How Popular Is The JOBS Act?

The “easy funding” idea was to offset the rising unemployment rate. The act was to fuel people to build an entrepreneurial career. Thus pulling yourself out of the recession by your own bootstraps. Has it worked so far? Right now there isn’t an answer, because the act was just signed into action a few months ago. However are small businesses looking down on the consequences of the new act that lightened up crowdfunding?   Despite the act, businesses are still having a rough time finding funding to not only expand their business but to provide enough finance for their employees. Surprisingly many have not jumped on the JOBS Act bandwagon.



Demonstrated by surveys conducted by Pepperdine University Graziadio School of Business and Management along with Dun & Bradstreet Credibility Corp, a very small percentage of businesses felt the act would actually help smaller businesses. A little more than half felt businesses would still not raise enough money through crowdfunding even after the passing of the JOBS Act. Adding to the low support, little less than half were unsure about the effects of the act.   Sadly the financial environment suffocates the growth of smaller business. States like Nevada, New Mexico and Maryland rank as the top three states that feel they are losing out due to the financial environment.


Crowdfunding Versus The Traditional Way

Small business owners know that crowdfunding can certainly help a business out. Crowdfunding has even made it to the Internet through sites like Such sites allow for people to donate to a particular project, in return the investors may ask for a small stake in the success of the business or for other rewards.   The JOBS Act allows small business to have access to more money with less hassle – by lessening the paperwork that has to be filed with the SEC.



So crowdfunding sites would be easier to use and allow for quicker transactions.   Still, many smaller businesses still use the more old fashion way of financing their business. A quick call to the family, credit cards, venture capital funding, angel investors, and loans are still the method chosen to fund many small businesses.   It has only been a few months since the JOBS Act was passed. Has your company taken advantage of crowdfunding? How do you see the JOBS Act affecting startups and entrepreneurs? We’d love to hear from you in the comment section below.


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Author : David Hopkins

David tries to feel the world through his five senses. Traveling to the beach is his way to get away from the big city. Poetry was his introduction to exploring writing as an art and not just something that has to be done. Finding his voice through words is very important to David.

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